A Non-Controlling Interest Arises Only When a Parent Company Purchases

question 63

Multiple Choice

A non-controlling interest arises only when a parent company purchases:

• A) less than 20% of the stock of a subsidiary company
• B) between 20% and 50% of the stock of a subsidiary company
• C) more than 50% but less than 100% of the stock of a subsidiary company
• D) all of the stock of a subsidiary company

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Definitions:

Marginal Cost

The cost of producing one more unit of a good or service.

Government

Government refers to the group or system of individuals governing an organized community, often a state, and it is responsible for creating and enforcing laws, policies, and regulations.

Total Surplus

The sum of consumer and producer surplus, representing the total net benefit to society from the production and consumption of goods or services.

AC

Short for Alternating Current, a type of electrical current where the flow of electric charge periodically reverses direction.